Opportunity to Go Long On Fastly
Fastly $FSLY is down 26% in after-hours trading today because they lowered quarterly revenue guidance. This is due to TikTok using Fastly less for Content Delivery Network (CDN) services amidst President Trump's threatened ban of TikTok in the US.

In the short term, this is spooking investors because TikTok makes up as much as 12% of Fastly's revenues. But in the medium and long term I don't think this matters much at all. There's a chance that this all gets sorted out and TikTok goes back to using Fastly just as much as before.

Even if TikTok's usage doesn't go back to normal, Fastly's services are superior enough to competitors such that I still expect them to continue to sign up big new customers in the future and increase their services with current customers (which include Amazon, Pintrist, Stripe, Yelp, The New York Times, New Relic, the list is impressive).

I personally will be buying shares tomorrow morning with the expectation of holding on 5+ years. As always, with high growth companies of the future, you can expect that drawdowns like this will continue to happen periodically, so don't invest if you're not in a place financially or psychologically to withstand a 30% drawdown. Only invest an amount of money you are confident you won't need for the next 5 years.

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Allan Oloo's avatar
Are you advocating for $FSLY due to the future growth of edge computing? What about $NET $SNOW $CLDR? Do you believe $FSLY will have a competitive advantage against these other edge computing platforms? I am challenged with whether I should bet on $FSLY being a leader in their industry.
Nathan Worden's avatar
Correct, the thesis remains intact that edge computing will be the direction the whole industry continues to move. Having computation and data storage closer to the location where it is needed improves response times and saves bandwidth. And Fastly is doing a great job in this area by being developer focused.

Great question @olooa11an regarding a competitive advantage against the other edge computing platforms. Here's how I'm thinking about the competitive landscape:

Cloudflare $NET: Larger (17bn market cap vs. 9.9bn). Cloudflare is known for having an easy setup while Fastly is known for "real time updates" aka, they're fast. I'm long both, but personally, when thinking about where to optimize, speed makes a huge difference. Giving developers the tools they need and then getting out of the way is an attractive bet.

Snowflake $SNOW : The only cloud-first data warehouse. They're going to do great. The question is just, how great. And are they over hyped for now? Not an immediate threat to Fastly, but could be down the line. I haven't invested yet because I do believe the hype got ahead of itself.
Nathan Worden's avatar
Regarding Cloudera $CLDR , I have less familiarity with them, but I believe they are a Fastly Customer: https://www.fastly.com/industries

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